China Eximbank provides $99.2 million preferential buyer's credit for Multipurpose Dam Development Project

Project narrative

On June 13, 2012, China Eximbank and the Government of Cambodia signed a $99,283,600 preferential buyer's credit (PBC) agreement for the Multipurpose Dam Development Project. The PBC carried the following borrowing terms: a 20-year maturity, a 7-year grace period, and a 2% interest rate. The purpose of the project was to construct a 13.1MW dam — located in the middle and upper reaches of the Sangker River near Teuk Sab village within Phlov Meas commune, Ratanak Mondul district, and Battambang Province — for irrigation, flood control, and power generation purposes. The dam site is 4km below the junction of Sanker River and Kranhaung River, about 45km away from Battambang City and about 332km from Phnom Penh. The dam was designed to regulate the provision of water in dry and rainy years, providing irrigation water downstream and increasing crop yields. During the rainy season, the reservoir is used to impound floods, upgrade flood control capability downstream, regulate runoff by utilizing the reservoir, and develop hydro-energy resources. Guangdong Foreign Construction Company (GDFC) and Guangdong Yuantian Engineering Company were the contractors responsible for implementation. The planned construction period was 52 months. The project commenced on March 18, 2014 and it was completed on May 17, 2018. Upon completion, the project reportedly satisfied existing levels of irrigation water demand in the downstream irrigation area (47000 hectares of farmland) and the downstream urban area of Battambang suffered no flood damages due to effective management of the reservoir. Also, after the completion of the project, the farmland in the irrigation area was capable of yielding 2-3 crops per year (as opposed to 1 crop per year prior to the completion of the project). However, this project was also plagued by some controversy. In 2014, more than 100 local villagers in Sangke district protested (when their rice crops were threatened by drought) and called upon local authorities to force Guangdong Foreign Construction Company (GDFC) and Guangdong Yuantian Engineering Company to open the sluice gate to flood the parched farmlands.